Luigi Zingales: ‘Free-market’ and ‘pro-business’ are not always the same thing

Luigi Zingales isn’t trying to preach to the converted. He wants people to think in a way they haven’t thought before.

As a professor at the University of Chicago Booth School of Business, Zingales is certainly an advocate of free market economics and limited government. But his new book, “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity.” highlights several reasons why “free-market” and “pro-business” aren’t always the same thing. And this realization leads him to challenge many long-held positions within conservative orthodoxy.

Here’s an example. In order to protect competition, Zingales supports Anti-Trust laws, which are typically seen by many conservatives as an act of government “meddling” in business. Zingales differs with this idea: “When a company becomes too big, it also becomes too powerful politically… The government becomes an agent for the corporation, rather than a representative of the people … Anti-trust was created as a political check and balance.”

Zingales is also concerned about the increasing power of corporate interests in government — and the prevailing attitude within conservatism that all problems can be solved via deregulation: “I am worried about government intrusion, but I don’t think — like many conservatives — that the best system is the system without a government,” Zingales said. “True competition is not a jungle without any rules, because in a jungle the strongest prevails, not the most efficient … “I don’t think the answer is zero government, complete laissez-faire.”

Zingales celebrates America’s embrace of free market principles, reminding us that, “In Italy, competition is seen as a negative thing.”

Also putting him at odd with conservatives, Zingales endorses the idea of trial lawyers and class-action suits, believing they are essential to ensuring property rights are allocated properly. Lawyers want to make money, so the best lawyers will be more likely to represent rich clients unless you allow for class-action lawsuits. “By giving the idea of bringing together these claims, Zingales says, “you are equating one million one dollar claims to one claim of one million dollars.”

So there you have it. A fascinating book — and an interesting podcast, I might add.